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ABC: Nonresidential Job Growth Higher in October

Wednesday, November 18, 2020

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The Associated Builder and Contractors recently released its own analysis of construction industry jobs in October, based off the U.S. Bureau of Labor Statistics.

The ABC mainly echoed the 84,000 net number that was also released by the Associated General Contractors of America, and broke the numbers down into several subsects.

More Numbers

Most notably, the ABC pinpointed that nonresidential construction employment added 59,700 jobs in October.

All three nonresidential subcategories experienced increases: specialty trade contractors added 27,500 positions, heavy and civil engineering added 18,800 jobs and nonresidential building added 13,400.

ktsimage / Getty Images

The Associated Builder and Contractors recently released its own analysis of construction industry jobs in October, based off the U.S. Bureau of Labor Statistics.

“Nonresidential construction’s momentum is especially impressive,” said ABC Chief Economist Anirban Basu. “Despite tighter lending conditions, negatively impacted state and local government finances and deteriorating commercial real estate fundamentals, nonresidential construction experienced job creation in each of its three major segments. That said, there is still much ground to be made up. A year ago, nonresidential construction employed nearly 208,000 more people than it does today. The sector has lost nearly 5% of its jobs compared to one year ago, while ABC’s Construction Backlog Indicator shows the average contractor has 1.5 fewer months of backlog than it did one year ago."

In addition, the ABC noted that during the last six months, the industry has added 789,000 jobs, recovering about 73% of the jobs lost to the COVID-19 pandemic.

The construction unemployment rate was 6.8% in October, up 2.8 percentage points from the same time last year, but down from 7.1% a month earlier. Unemployment across all industries declined from 7.9% in September to 6.9% last month.

“While October’s employment report surprised to the upside, contractors should remain on guard,” said Basu. “Cash management will be particularly important going forward. Another recession is possible as COVID-19 rages across the nation, driving up hospitalizations. While household spending will continue to be a source of positive momentum, state-mandated economic lockdowns are likely to become more of a factor during the weeks ahead. That would result in an interruption to the robust recovery that has been building since May, and would delay the arrival of nonresidential construction’s complete recovery.”

On the commercial side, residential construction as a whole added 23,800 jobs, while residential building added 6,000 jobs and residential specialty trade contractors gained 17,800 jobs.

The AGC’s Numbers

Also at the beginning of the month, the AGC released its jobs report noting that jobs were added in both nonresidential and residential categories, climbing to about 7,345,000 jobs—an increase of 1.2% from September. The Association noted, however, that the COVID-19 pandemic is still causing a growing number of projects to be delayed or canceled, and employment still remains at about 3.9% below the February peak.

“The employment data for October is good news, but our latest survey found that only a minority of contractors expect to add to their workforce in the next 12 months,” said Ken Simonson, the association’s chief economist.“As project cancellations mount, so too will job losses on the nonresidential side unless the federal government provides funding for infrastructure and relief for contractors.”

And while nonresidential jobs did increase, employment in that sector remains at around 262,000 jobs, about 5.6% lower than its February peak.

On the flip side, residential employment is down just 1.1% from February, and those figures are the lowest they’ve been since the pandemic struck the industry.

Other notable figures from the October survey, which covered more than 1,000 contractors, include:

  • Three out of four respondents reported that a scheduled project had been postponed or canceled; and
  • 37% of respondents expect their headcount to increase over the next 12 months.

   

Tagged categories: Associated Builders and Contractors Inc. (ABC); Associated General Contractors (AGC); COVID-19; Economy; Good Technical Practice; Jobs; NA; North America

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